Telecoms offer greener future

There are significant opportunities for the local telecoms industry to boost cost and energy efficiencies, but this demands greater involvement by the regulator, says telecoms partner at Deloitte Danie Crowther.

Deloitte recently highlighted key areas where the telecoms industry can help cut costs and reduce carbon dioxide (CO2) emissions, both in its own and other sectors. It's estimated the industry could lower global emissions by between 5% and 10%, according to a 2008 Ovum report, states the firm.

This can be done by exploiting opportunities to help other business sectors cut energy use, such as using navigation technologies to ease traffic congestion, and enabling next-generation energy management solutions.

Crowther says there are two main reasons why the telecoms sector has the potential to drive efficiencies and emissions reduction. “Firstly, it's a fast-changing, continuously advancing industry; assets have a significantly shorter lifespan, and can be upgraded quickly to more environmentally friendly models.

“In telecoms, assets are largely base stations and networks and, as advances in radio and other technologies come in, systems are upgraded or replaced. Both locally and globally, networks are now significantly more efficient than a year ago.”

Secondly, notes Crowther, telecoms act as a powerful catalyst, assisting industries and governments to reduce emissions generally.

He mentions partnerships like the Vodafone-TomTom collaboration, whereby drivers can be notified of traffic pile-ups in real-time and rerouted accordingly. The system works by tracking the movements of cellphones (on the Vodafone network) inside cars to determine traffic flow patterns. This data is merged with information from TomTom GPS devices and other traffic services to inform drivers of problems so they can take alternative routes, reducing travel time and congestion.

Remote electricity management is another area where telecoms can offer energy savings, says Crowther, as it could give city councils visibility into which devices are using energy at certain times of the day.

automated basis. By providing the communications to enable the effective functioning of these devices, telcos could help drive changes in energy consumption behaviour, says the firm.

“This will allow telecoms operators to change their role from merely providing a 'dumb pipe' capability, to becoming a provider of value-added energy management services,” states Deloitte.

“I see significant changes in the next 10 years as these kinds of technologies start invading our lives,” says Crowther. He adds, however, that this will also create challenges.

“For example, if a smart meter installed in someone's home is feeding Eskom constant information about which devices are being used at what time, this provides extensive knowledge about consumer behaviour.

“While it can be a powerful tool in terms of managing environmental impact, it will also require a legal framework to be workable in terms of privacy and consumer rights issues,” he points out.

According to Deloitte, the telecoms industry generates approximately 0.7% of global CO2 emissions globally. It notes that although telcos are responding to the issue, there is still much room for progress in areas like increased network sharing, reduced power consumption, and improved field force effectiveness.

“To achieve some of these things we need collaboration between operators, and there is significant conflict between competition law and environmental law,” states Crowther. “For example, operators cannot have discussions among themselves about where to put base stations, due to the risk of collusion accusations and penalties by the Competition Commission.”

According to Crowther, there have been instances where one operator already had a base station in a remote site, and other operators asked whether they could use it. But this is not done in a forward-looking manner, and operators cannot plan infrastructure roll-out on this basis, he adds.

Crowther says the only way to achieve this is through the regulator. “It's unlikely that operators will run the risk of being fined by the Competition Commission by trying to run things themselves. They will have to approach the commission and explain the efficiency benefits of sharing certain infrastructure. Competition law is important, but they must realise the impact on the environment.”

In addition, notes Crowther, all networks have different suppliers, and operators may choose various suppliers' technology, which leads to difficulties in achieving environmental benefits when developing standards.

Finally, he explains it's quite expensive to pursue environmental strategies if one's competitors are not. “There's not enough environmental regulation. If ICASA starts saying 'you have to disclose certain information about power consumption, how much electricity you use', and so on, then there will be a greater move in this direction.”

He adds that telcos are generally doing quite a bit in terms of being environmentally responsible, because it reduces costs and uses less energy. “A lot of telcos are using these kinds of strategies, but not publishing them. King III should make this more visible, and we're likely to see a lot more of this information made public over time.”

In 2008, estimates placed the telecoms industry's revenue at $1.9 trillion, according to Deloitte, and these numbers are anticipated to increase as data traffic is set to grow five-fold between 2008 and 2013, it adds.

This “eat as much as you can” phenomenon has serious implications for the industry, says Crowther. “In SA, most pricing models for voice and data are based on an amount for a certain capacity, and if you go over the limit you're charged by unit.

“This has been a saving grace in SA, as in other countries you have a fixed fee for unlimited access - because they have more broadband capacity - which results in a huge amount of traffic.”

Crowther says, one thing operators can do locally and globally is throttle traffic in networks, as a significant portion of this is unethical traffic - such as the illegal download of movies. So if the network is smothered with traffic, they have the ability to identify if someone is illegally downloading a movie, and cut their access, he explains.

Smartphones have also had a major impact on networks over the past 18 months, says Crowther, and a dramatic effect on people's lives. “They've made communication more flexible and capable, and had a significant impact on network capacity, as the acceleration of uptake was not expected.”

While there are opportunities for telecoms to deliver benefits, Deloitte says experience in the industry suggests reducing emissions is as much a behavioural challenge as a technology one.

“Individuals and companies do what is measured, reported, rewarded or penalised,” argues Crowther. “So if a company is required to do something and then reports on it, it will either be rewarded, as consumers may prefer to buy from it because of its green rating, or penalised in terms of measures such as emissions certificates. Only then will we see changes in behaviour.

“I think this is something we will see a lot more of in SA in future, but it requires a combined effort by consumers, government, and big business,” he concludes.